Adani Group Eyes Greener Cement Production After Acquiring Holcim’s Stake in ACC, Ambuja

Shares of ACC were trading Rs 2,195, up almost 4 per cent, while the shares of Ambuja Cements were trading 3.07 per cent higher at Rs 369 on the BSE

New Delhi: Adani Group’s acquisition of Holcim’ stake in ACC and Ambuja Cements is the largest ever in India’s infra and materials space valued at $10.5 billion. With this buy, Adani Group is now the country’s second-largest cement manufacturer (capacity ~70 MTPA), the statement said.

Gautam Adani, chairman of Adani Group, said, “Holcim's global leadership in cement production and sustainability best practices brings to us some of the cutting-edge technologies that will allow us to accelerate the path to greener cement production,” while adding that Ambuja Cements and ACC are two of the strongest brands recognised across India.

He said, “When augmented with our renewable power generation footprint, we gain a big head start in the decarbonisation journey that is a must for cement production. This combination of all our capabilities makes me confident that we will be able to establish the cleanest and most sustainable cement manufacturing processes that will meet or exceed global benchmarks.”

The news of acquisition by Adani Group has propelled the stocks of ACC and Ambuja Cements higher. The deal was disclosed on Sunday night, while the shares of the two cement majors rose significantly on Monday during market hours.

At 1 pm, the shares of ACC were trading Rs 2,195, up almost 4 per cent, while the shares of Ambuja Cements were trading 3.07 per cent higher at Rs 369 on the BSE.

According to the release, the acquisition propels Adani into the cement business, and will establish its new materials, metal, and mining vertical via an offshore special purpose vehicle (SPV).

Through this acquisition, Adani Group had entered into definitive agreements for the acquisition of Switzerland-based Holcim Ltd’s entire stake in two of India’s leading cement firms – Ambuja Cements and ACC.

Holcim, through its subsidiaries, holds 63.19 per cent in Ambuja Cements and 54.53 per cent in ACC (of which 50.05 per cent is held through Ambuja Cements). The value for the Holcim stake and open offer consideration for Ambuja Cements and ACC is $10.5 billion, which makes this the largest ever acquisition by Adani, and India’s largest ever M&A transaction in the infrastructure and materials space.

Jan Jenisch, CEO of Holcim Ltd in a statement, said, “I am delighted that the Adani Group is acquiring our business in India to lead its next era of growth,”

Currently, Ambuja Cements and ACC have a combined installed production capacity of ~70 MTPA. The two firms are among the strongest brands in India with immense depth of manufacturing and supply chain infrastructure, represented by their 23 cement plants, 14 grinding stations, 80 ready-mix concrete plants, and over 50,000 channel partners across the country.